September 28, 2012 in Business, Health

Drugmakers pay billions in fraud, marketing cases

Matthew Perrone Associated Press
 
Allegations

Overcharging state health plans such as Medicaid was the most common allegation, while unapproved drug marketing was the most costly, the group Public Citizen said.

WASHINGTON – Federal and state prosecutors have collected more than $30 billion from drug companies for alleged fraud and illegal marketing over the past 20 years, according to a new report by consumer advocacy group Public Citizen.

The report shows that state attorneys are increasingly following the lead of federal prosecutors in seeking multimillion-dollar settlements with drugmakers such as GlaxoSmithKline and Eli Lilly & Co. Analysis by Public Citizen found that state governments have collected $3.7 billion from drugmakers since 2009, or roughly six times more money than in the previous 18 years combined.

Drug companies are permitted to market drugs only for uses that have been approved by the Food and Drug Administration. In recent years the Department of Justice and state attorneys general have increasingly pursued cases of off-label marketing, or promoting drugs for unapproved uses.

Governments are spending more on prescription drugs as programs like Medicare and Medicaid swell with aging baby boomers. That increased spending has attracted scrutiny from investigators looking to recover taxpayer dollars.

“It should come as no surprise that states facing Medicaid budget shortfalls are finally deciding to root out fraud that has likely cost their taxpayers billions of dollars over the years,” said Dr. Sammy Almashat, with Public Citizen.

State and federal attorneys have collected $6.6 billion through mid-July this year, setting a record for settlement totals in a single year.

Three drug companies have paid two-thirds of the financial penalties paid out since November 2010: GlaxoSmithKline, Johnson & Johnson and Abbott Laboratories.

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